MPAA admit error in piracy study

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WASHINGTON -- The major motion picture studios have egg on their face Thursday as they have been trying to explain to Congress and educators why a key number in a highly-touted study of on-campus piracy was wrong.

In a statement issued Wednesday MPAA spokesman Seth Oster said a 2005 study the association commissioned from research firm LEK "incorrectly concluded that 44% of the motion picture industry's domestic losses were attributable to piracy by college students."

It turns out that only 15% of the industry's domestic losses came from college students, Oster said.

The LEK discovered that there was an error when they were computing losses for the MPAA's 2007 study.

"We take this error very seriously and have taken strong and immediate action to both investigate the root cause of this problem as well as substantiate the accuracy of the latest report," Oster said.

The mistake, which MPAA sources said LEK attributed to a "data entry" error, has left the association scrambling to contain any damage it may cause to the studios' battles against piracy.

MPAA president and chairman Dan Glickman and other executives have been using the 44% number in their arguments to get lawmakers to enact sanctions against an education community that has been reluctant, at times, to aid movie makers' anti-piracy crusade.

When told of the mistake Glickman was apoplectic and began a review of the association's "relationship" with LEK. The MPAA also hired a third party to review LEK's numbers for the nearly finished 2007 report.

MPAA officials point out that even though the number is less than half of what it has been using, the piracy problem on campus is still huge with nearly $250 million in losses attributable at the 15% number.

LEK made the mistake when it attributed all films downloaded as films that would have been purchased, said an industry source. If a survey subject said they downloaded 10 films, LEK said that was a one-to-one replacement for sales. The 2007 survey takes into account a substitutional difference, the source said.

Still, the mistake makes it more difficult to believe whatever numbers the MPAA or LEK generate, and it makes the studios look bad on the Hill, and has forced the MPAA executives to backtrack and make amends with lawmakers and the education community.